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A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a premium. Which of the following statements is CORRECT?
A. The bond's current yield is less than 8%.
B. If the yield to maturity remains at 8%, then the bond's price will decline over the next year.
C. The bond's coupon rate is less than 8%.
D. If the yield to maturity increases, then the bond's price will increase.
E. If the yield to maturity remains at 8%, then the bond's price will remain constant over the next year.
A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a premium. Which of the following statements is CORRECT?
A. The bond's current yield is less than 8%.
B. If the yield to maturity remains at 8%, then the bond's price will decline over the next year.
C. The bond's coupon rate is less than 8%.
D. If the yield to maturity increases, then the bond's price will increase.
E. If the yield to maturity remains at 8%, then the bond's price will remain constant over the next year.
Tshego MonchusiLv2
21 Jan 2021
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